2024 -- S 2725 AS AMENDED

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LC005419

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- DEFENDING AFFORDABLE

PRESCRIPTION DRUG COSTS ACT

     

     Introduced By: Senators Valverde, and Pearson

     Date Introduced: March 05, 2024

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS"

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is hereby amended by adding thereto the following chapter:

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CHAPTER 19.3

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DEFENDING AFFORDABLE PRESCRIPTION DRUG COSTS ACT

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     5-19.3-1. Short title.

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     This chapter shall be known and may be cited as the “Defending Affordance Prescription

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Drug Costs Act”.

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     5-19.3-2. Definitions.

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     As used in this chapter, the following terms have the following meanings:

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     (1) "340B drug" means a drug that has been subject to any offer for reduced prices by a

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manufacturer pursuant to 42 U.S.C. § 256b and is purchased by a covered entity as defined in 42

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U.S.C. § 256b(a)(4).

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     (2) "340B entity" means an entity participating or authorized to participate in the federal

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340B drug discount program, as described in 42 U.S.C. § 256b, including its pharmacy, or any

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pharmacy contracted with the participating entity to dispense drugs purchased through the 340B

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drug discount program.

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     (3) "Health insurer" means every nonprofit medical service corporation, hospital service

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corporation, health maintenance organization, or other insurer offering or insuring health services;

 

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the term shall, in addition, include any entity defined as an “insurer” under § 42-62-4 and any third-

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party administrator when interacting with health care providers and enrollees on behalf of the

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insurer.

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     (4) "Pharmaceutical manufacturer" means a person that manufactures a prescription drug

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and sells, directly or through another person, the prescription drug for distribution in this state.

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     (5) "Pharmacy" has the meaning set forth in § 5-19.1-2.

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     (6) "Pharmacy benefit manager (PBMs)" means a person or entity employed by for-profit

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companies that manage prescription drug benefits on behalf of private insurers, Medicare Part D

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drug plans, government employee plans, large employers, and Medicaid managed care

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organizations (MCOs).

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     (7) "Rebate(s)" means all price concessions paid by a manufacturer or any other third party

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to PBMs including rebates, discounts, credits, fees, manufacturer administrative fees, or other

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payments that are based on actual or estimated utilization of a covered drug or price concessions

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based on the effectiveness of a covered drug.

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     5-19.3-3. Prohibition of certain discriminatory actions related to reimbursement of

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340B entities.

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     (a) With respect to reimbursement to a 340B entity for 340B drugs, a health insurer,

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pharmacy benefit manager, other third-party payor, or its agent shall not do any of the following:

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     (1) Reimburse a 340B entity for 340B drugs at a rate lower than that paid for the same drug

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to entities that are not 340B entities or lower reimbursement for a claim on the basis that the claim

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is for a 340B drug.

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     (2) Impose any terms or conditions on any 340B entity with respect to any of the following

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that differ from such terms or conditions applied to non-340B entities on the basis that the entity

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participates in the federal 340B drug discount program set forth in 42 U.S.C. § 256b or that a drug

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is a 340B drug including, without limitation, any of the following:

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     (i) Fees, charges, clawbacks, or other adjustments or assessments. For purposes of this

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section, the term "other adjustment" includes placing any additional requirements, restrictions, or

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unnecessary burdens upon the 340B entity that results in administrative costs or fees to the 340B

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entity that are not placed upon other entities that do not participate in the 340B drug discount

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program, including affiliate pharmacies of the health insurer, pharmacy benefit manager, or other

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third-party payor.

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     (ii) Dispensing fees that are less than the dispensing fees for non-340B entities.

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     (iii) Restrictions or requirements regarding participation in standard or preferred pharmacy

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networks.

 

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     (iv) Requirements relating to the frequency or scope of audits of inventory management

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systems.

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     (v) Requirements that a claim for a drug include any identification, billing modifier,

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attestation, or other indication that a drug is a 340B drug in order to be processed or resubmitted

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unless it is required by the Centers for Medicare and Medicaid Services or the Medicaid program.

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     (vi) Any other restrictions, conditions, practices, or policies that are not imposed on non-

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340B entities.

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     (3) Require a 340B entity to reverse, resubmit, or clarify a claim after the initial

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adjudication unless these actions are in the normal course of pharmacy business and not related to

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340B drug pricing.

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     (4) Discriminate against a 340B entity in a manner that prevents or interferes with any

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patient's choice to receive such drugs from the 340B entity, including the administration of such

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drugs. For purposes of this section, it is considered a discriminatory practice that prevents or

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interferes with a patient's choice to receive drugs at a 340B entity if a health insurer, pharmacy

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benefit manager, or other third-party payor places any additional requirements, restrictions, or

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unnecessary burdens upon the 340B entity that results in administrative costs or fees to the 340B

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entity including, but not limited to, requiring a claim for a drug to include any identification, billing

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modifier, attestation or other indication that a drug is a 340B drug in order to be processed or

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resubmitted unless it is required by the centers for Medicare and Medicaid services or the executive

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office of health and human services in administration of the Medicaid program.

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     (5) Include any other provision in a contract between a health insurer, pharmacy benefit

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manager, or other third-party payor and a 340B entity that discriminates against the 340B entity or

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prevents or interferes with an individual's choice to receive a prescription drug from a 340B entity,

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including the administration of the drug, in person or via direct delivery, mail, or other form of

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shipment, or creation of a restriction or additional charge on a patient who chooses to receive drugs

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from a 340B entity.

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     (6) Require or compel the submission of ingredient costs or pricing data pertaining to 340B

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drugs to any health insurer, pharmacy benefit manager, or other third-party payor.

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     (7) Exclude any 340B entity from the health insurer, pharmacy benefit manager, or other

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third-party payor network or refusing to contract with a 340B entity for reasons other than those

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that apply equally to non-340B entities.

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     5-19.3-4. Exclusion.

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     Nothing in this chapter applies to the Medicaid program as payor when Medicaid provides

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reimbursement for covered outpatient drugs as defined in 42 U.S.C. § 1396r-8(k).

 

LC005419 - Page 3 of 5

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     5-19.3-5. Prohibition on certain discriminatory actions by a pharmaceutical

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manufacturer, agent, or affiliate of such manufacturer related to 340B entities.

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     (a) A pharmaceutical manufacturer, agent, or affiliate of such manufacturer shall not deny,

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restrict, prohibit, or otherwise interfere with, either directly or indirectly, the acquisition of a 340B

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drug by, or delivery of a 340B drug to, a pharmacy that is under contract with a 340B entity and is

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authorized under such contract to receive and dispense 340B drugs on behalf of the covered entity

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unless such receipt is prohibited by the United States department of health and human services.

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     (b) A pharmaceutical manufacturer, agent, or affiliate of such manufacturer shall not

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interfere with a pharmacy contracted with a 340B entity.

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     5-19.3-6. Violations.

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     (a) The commission of any act prohibited by this chapter is considered a violation of the

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Rhode Island deceptive trade practices act set forth in chapter 13.1 of title 6, as may be amended

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from time to time, and subject to any penalties hereunder; provided, however, that there shall be no

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right to bring a private or class action pursuant to such chapter 13.1 of title 6.

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     (b) A violation of chapter 13.1 of title 6 ("deceptive trade practices") shall occur each time

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a prohibited act is committed.

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     5-19.3-7. Federal preemption.

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     (a) Nothing in this chapter is to be construed or applied to be less restrictive than federal

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law for a person or entity regulated by this chapter.

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     (b) Nothing in this chapter is to be construed or applied to be in conflict with any of the

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following:

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     (1) Applicable federal law and related regulations.

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     (2) Other laws of this state if the state law is compatible with applicable federal law.

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     (c) Limited distribution of a drug required under 21 U.S.C. § 355-1 is not to be construed

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as a violation of this chapter.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- DEFENDING AFFORDABLE

PRESCRIPTION DRUG COSTS ACT

***

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     This act would prohibit any health insurer, pharmacy benefit manager, or other third-party

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payor from discriminating against any 340B entity participating in a drug discount program. This

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act would further prohibit a pharmaceutical manufacturer or wholesaler from denying, restricting,

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prohibiting or otherwise interfering, directly or indirectly, with any contract to dispense or receive

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340B drugs. Violation of the provisions of this act would be considered a violation of chapter 13.1

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of title 6 ("deceptive trade practices").

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     This act would take effect upon passage.

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LC005419

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